Informal tax reviews are worth it

Man who owns island got an informal review to his Lehigh County reassessment, many aren't that lucky

May 12, 2012|Paul Muschick | The Watchdog

Ernie Perna would like to sell you an island in the Lehigh River. Seriously, he would, if you're willing to pay him what Lehigh County says his island is worth.

His dispute with the county over the tax reassessment on his 1.8-acre island shows why all property owners should have the opportunity for an informal review of their new assessment. He got a review and it paid off, in a lower tax bill and advice that he possibly could lower it even more.

"I got information I didn't have before," Perna, of Allentown, told me. "Without that information, I probably would have given up."

An informal review is a precursor to a formal assessment appeal. In the review, you meet with an assessor to discuss your new property value and any information that you believe would change the value.

When Lehigh County drew up the reassessment process, it encouraged property owners with questions about their new assessments to schedule an informal review.

Then the county changed the rules last month and told commercial and industrial property owners they couldn't have informal reviews because the county didn't have time for them. That makes the process unfair, because all taxpayers aren't getting the same opportunity. Residential reviews still are being held.

This doesn't mean commercial and industrial property owners can't challenge their new assessments. They'll just have to take their case directly to a formal appeal before the county Board of Assessment Appeals.

But they'll lose any potential benefit of a prior informal review.

As in Perna's case, the answers taxpayers get there could influence their decision to file a formal appeal, which can come with a cost because you might need an appraisal.

The county considers Perna's island in Salisbury Township to be vacant industrial land, though the township zones it as conservation-residential. So he was among about 2,200 property owners denied their informal reviews. He didn't accept that unfair rejection and talked his way in the door last week.

He walked out the door with a lower tax bill.

Perna said that after making his case to an assessor — that the island floods and can't be built on — he was told his tax bill would be reduced from the estimated $175 to about $58. He said the assessed value — which went from $900 to $8,400 — wasn't reduced, but the tax liability was, through a change in the rating that's part of the formula.

He said an assessor told him if he follows up with a formal appeal, the appeals board might reduce his taxes even more by lowering the assessed value. He'll do that.

"I've dealt with bureaucrats in the past and I was shocked at how cooperative, polite and eager they are to help," Perna told me.

That's why everyone deserves the opportunity to have an informal review.

Perna's experience also shows that despite the county's sending letters to the contrary, it is finding time to hold informal reviews for some commercial and industrial property owners. You just have to complain about being shut out.

Perna complained directly to the tax office. He figured if he could get a chance to explain his case informally, it would be pretty clear his island wasn't worth the new assessed value.

"If anyone wants to give me $8,400 for it, they can own an island," Perna told me before the county gave in and granted him a review.

Others, including Dean and Rochelle Bachman of Upper Milford Township, got in the door by complaining to the Watchdog or the county commissioners.

I told you about the Bachmans two weeks ago. They own Bachman Auto Repair & Service and were facing a $2,223 tax hike. They wanted an informal review to point out issues affecting the value of their property, such as zoning restrictions and poor water quality.

I put them in touch with Commissioner Mike Schware, who got them a review. They haven't gotten the results, but like Perna, they believe the county took their concerns seriously.

Fred Silver's company owns a property in Catasauqua. County officials aren't giving him an informal review despite his asking after he received the denial letter.

His tax bill is projected to drop by about $678, but he questions the county's raising his property's assessment. He said he bought the building at the height of the market, and doesn't see how the county can think it's worth more now.

Tom Muller, the county's director of administration, told me that while a handful of commercial and industrial property owners have been granted reviews, Silver wasn't because his property is a "very unusual situation."

It's a senior living center that used to be a vacant hotel. Muller said issues involving a property like that are best handled during a formal appeal.

"He would have ended up there, anyway," Muller told me.

Silver doesn't consider that a fair answer. Neither do I.

"This is an example of unequal treatment for similar situations," Silver told me. "How can they give to some and not to others?"

The county has said the informal reviews aren't legally required. They're not, but they're clearly beneficial, as Perna and the Bachmans can attest.

If you want an informal review and you've been denied, don't take no for an answer. You still have time to make yourself heard.

The Watchdog is published Thursdays and Sundays. Contact me by email at watchdog@mcall.com, by phone at 610-841-2364 (ADOG), by fax at 610-820-6693, or by mail at The Morning Call, 101 N. Sixth St., Allentown, PA, 18101. Follow me on Twitter at mcwatchdog and on Facebook at Morning Call Watchdog.